Max here with an Op-Ed, people. Shouldn’t be a long one, but hey, it’ll give you some content while waiting for the cover reveal for Starforge! More on that later (it deserves its own post). For now, today’s Op-Ed.
So, if you haven’t heard, Disney has joined the ranks of streaming services announcing price hikes. In this case, it’s Disney+’s first while for others such as Hulu or ESPN it could just be written away as “yet another price hike.” In addition, Disney unveiled that Disney+ will now have advertising! Just like everyone wanted!
Of course, no one wanted this. But one thing has become clear over the last year or two of the so-called streaming wars: For many of the companies involved, the goal is merely to return to the most profitable section of entertainment they can think of, AKA cable.
Don’t believe it? Look at how they’re rolling out advertisements. Did you know that cable television was advertisement free originally? That’s right! Originally, you were paying to not have ads like broadcast television did. But once the audience was captured, the ads rolled in, until cable television became an advertising service more than an entertainment venue. After all, why collect money from one side of the equation when you can collect it from two sides of the equation? Double-dipping! American business ingenuity at its finest!
Disney very clearly has its sights set on the old ways, with how they excitedly push “bundling” Hulu, Disney+, and ESPN in one package for a “reduced” rate. Nevermind that there are advertisements now, look how good a deal you’re getting! Similar is happening with Netflix and other streaming services as CEOs seek to return to the golden age of captive television piggy banks.
The problem as I see it, however, is that it just won’t work. Because the market that let that golden piggy bank exist no longer does.
See, here’s the thing. Look at the age of the CEOs behind these decisions. Because this is America, and we believe that anyone under the age of 60 doesn’t deserve any position of decision-making, the folks that are behind these decisions are all above sixty years old. In the cases where the CEO of a streaming service isn’t, they’re little more than an errand boy or girl for the CEO of the owning company they report to.
My point being is that everyone making these decisions about adding ads and driving prices up, or making bundles is from a particular age group, that being the only age group in the US that is seeing an increase in television and video consumption.
See, here’s the thing: If you look at television and video consumption split among ages, there’s a very clear dividing line: Those above 55 are watching more television show-style programming than ever, while those below the age of 55 are, with increasing jumps as the age-value goes down, watching less and less.
Now, that doesn’t mean they’re using screens less. Just that they’re using them for different things. Esports and Twitch viewing, for example. Or Youtube. Those are all but nonexistant over 55.
But it shows a generational disconnect. The average 15-19 year old in the US watches only 2 hours of television-style content a day, while those in the 55+ area range from 3.5 to 4.7 hours of television content every single day.
That is a phenomenal amount of television for a day. Worse, some source suspect that the 57-75 age range more than half watched almost 7 hours a day, with outliers dragging the average down.
Note that these numbers, to the best of my knowledge and as several stated, include streaming services content.
My point being that if you look at the numbers, the 55-75 age group, which includes Boomers and Gen-X, was THE couch potato generation. They loved television. Consumed it at a staggering rate. This is why cable was such a huge financial success: The large majority of anyone in the 55-75 age group has had cable their entire life. It’s not just something you might get, it’s a requirement for living. This is an age group that in one week averages more than 47 hours of television content watched. As someone who only averages 12 hours a week of gaming time, the idea of watching television for 47 hours just sounds like a disgustingly frivolous use of my time.
But for this age range it isn’t frivolous. It’s the way things are. And for many, the way things always should be.
Let me share a personal experience: When I was in college, my roommates and I moved into a place that had cable. We decided that the cost, even split eight ways, was far too much, as it was several hundred a month. So we axed it. When I mentioned this at a family event, the sheer shock and outrage of what I’d done was frankly disturbing. I had older relatives asking how I would know what was going on in the world? What would I watch? What was the TV for if not playing cable at every chance? How was my generation going to be informed if we didn’t have cable? The fact that we had cut cable was, to some, a mark of shame against our generation.
This wasn’t the only time I faced pushback from those of an older age over not having cable (or later, a streaming service). When the house was sold and people toured it, shock and dismay was expressed that cable was not part of the home from older viewers.
I bring up these experiences, which I’m certain others of my generation echo and could share, to illustrate a point: Cable succeeded because to an entire age group, cable was part of the day to day life. Not having that was seen as strange and alien.
I think it says something then, that all the age demographics below that 55 cut-off are seeing year over year decreases in television consumption. The 15-19 age group has, over the last ten years, dropped nearly a half-hour of television viewership a day (again, this includes watching streaming services like Netflix or Disney+). Ages 20-24 has dropped by 15 minutes. 25-34 by a half-hour as well. Same with the 35-44 group.
Basically, what I’m getting at is that the people making the decisions behind streaming services right now, services that are increasingly becoming “New Cable,” are the same people who have had, historically, a sky high consumption of cable. A consumption that is not matched by the age groups that with every passing day are becoming their biggest market.
If those that are now 55 and up were in the 15 and up bracket as they were when cable began its meteoric rise to riches. They are the demographic that, to exaggerate slightly, do not seem to be able to live without network television content. When cable prices went up, they simply shrugged and said “Okay, I’ll pay because I need it.”
But those below that age line don’t seem to share that mindset, and that’s going to be what hamstrings things for streaming. Those calling the shots have the mindset I was faced with at that family event so many years ago of “How can anyone live without this? They’ll pay and they’ll accept ads because they can’t not have it.”
But from what I’m seeing across friends ranging from 20-40 … that simply isn’t true. It’s a generational gap, a line in the sand between “I have to have this” and “Well, guess I’ll do without.” When I asked a friend of mine yesterday about the price increase and advertising announcement, he frankly stated “Well, I guess I’ll have to see if I think it’s worth it.” Since he is someone who already cut Netflix when their price went up as well as another premium service when he decided that he wasn’t using it enough … Well, Disney+ may very well lose another subscriber.
There isn’t much else to this post outside of saying that I think those in charge of streaming services are making a mistake by longing for the days of “easy money cable.” That era is dead and gone, and those that grew up under it aren’t just dismissive of it: Many of them outright despise it. Streaming is betting on capturing/reclaiming a market that no longer exists. The demographic has shifted. Television viewership isn’t what it once was. And as companies like Disney+ try to recreate cable, the same cord cutting will occur.
Streaming, to put it simply, cannot follow the path cable once did because, I believe, the market won’t support it. There’s more to life than television, and if Disney and other companies can’t get their executives to realize this, what will result is …
Okay, just large losses of money as executives greedily claw what little they can out of the remaining streaming subscribers. But unlike cable, who had the inertia to lock people into multi-year contracts, streaming doesn’t have that kind of weight yet. People can, will, and are walking away already as prices continue to rise and advertising creeps back in.
Streaming seems to want to have it all. Advertising dollars, subscriber dollars, and every other penny they can get. But the younger age demographic doesn’t seem interested in effectively being a “sugar daddy” to such a process. Get your money from subscribers, or from ads, but double-dipping? No thanks. You get one …
Or you get none.